Ofcom acts to reduce BT rural broadband charges

British telco regulator Ofcom has moved to reduce BT's charges for access to the firm's network which may lead to cheaper broadband for rural customers.

The move will see BT compelled to reduce charges to other ISPs by 10.7 per cent and 14.7 per cent but only in areas where so-called local loop unbundling, or the installation of rival equipment in exchanges, has not been undertaken.

Ofcom said the reduction is targeted at "primarily rural, less densely populated areas" which could benefit around 3 million homes and businesses.

The move also only applies to base ADSL 1 networks offering speeds of up to 8Mb/s, Ofcom has exempted BT from charge controls for ADSL2+ in an effort to "encourage BT Wholesale to invest in this new technology."

Ofcom said the price reduction would "incentivise efficient investment by ISPs to roll out their own networks in these areas and enable them to compete with BT Wholesale."

However Trefor Davies, CTO of ISP Timico, told CNET that the move may not have the intended effect, saying: ""If the pricing is being driven down, it makes the business case for LLU a lot harder."